ALEX BRUMMER: World's leaders waiting on a Mexican wave

Los Cabos in Mexico might not seem the obvious place for the world’s political and finance leaders to be on Monday morning as the election results from the re-run Greek elections, and the second stage French parliamentary poll, are absorbed.

But by unhappy co-incidence, that is where the Group of 20 most powerful economies are holding their summit.

On paper at least the G20 is the most appropriate forum for dealing with big international financial crises. It was established as the key steering group for the global economy by former prime minister Gordon Brown in early 2009, when he claimed to have saved the post Lehman world.

Dire tone: Bank of England governor Sir Mervyn King

Portents are not that good. The internal strains among the eurozone politicians, now exacerbated by the open differences between Germany and France, will not help.

But with China’s economy slowing and President Obama needing to get himself re-elected against a slowing employment market, there will be a strong push to make sure that the International Monetary Fund’s loan resources are bolstered. At the last count the fighting fund had reached $400million.

Britain, as disclosed at the Mansion House, has already put in place its emergency funding.

The first of the £5billion of liquidity auctions that will supplement the Bank of England’s discount window, will take place next Wednesday and will continue as long as the snarl-up in credit markets goes on.

That could be a long time.

Small businesses are already expressing scepticism about the ‘fund to lend’ scheme aimed at getting £80billion of credits out to households and firms as quickly as possible. It is easy to bring the horse to water, as other schemes have demonstrated, but it is harder to get them to drink.

This is especially so given the dire tone adopted by Sir Mervyn King – or Sir Mervyn Keynes as one analyst called him – at the Mansion House on Thursday night that would be enough to put anyone off investing.

The first line of resistance, when the markets open on Monday, will almost certainly be the central banks that are ready to come together to provide cash, liquidity, directly to the banking system and through swap arrangements. But this is more sticking plaster and bandages.

The spectacular cure is as far away as ever.

Exchange and mart

Another day, another big overseas sale, and I am not talking about Sarsons vinegar, a tragedy for fish and chip lovers.

This time it is the last bastion of ‘open-cry’ trading in the Square Mile, the London Metal Exchange, that has been auctioned off to the Hong Kong Stock Exchange (HKEx) for a stonking £1.4billion. The 100 or so member owners of the LME must think Christmas came very early.

One can understand why the HKEx is so interested. China, the ultimate controller of the Hong Kong economy, has become among the biggest consumers of commodities in the world and the LME is a leader in dealings in both physical and future non-ferrous metals including copper.

All the signs are, however, that despite the battle for control of the LME, it has been going through a bad patch with the volumes for copper, aluminium and zinc dramatically down in the first five months of this year compared with 2011.

That may reflect the deterioration in the global economic outlook but also suggests that trades may be bypassing London.

Despite being the world’s second largest exchange, the HKEx has not been part of the global consolidation of exchanges as trading platforms across the globe have gone digital, and ever faster.

It has largely confined itself to shoring up relationships with the neighbouring Shenzhen bourses, just across the border, and fast expanding Shanghai. Given the Chinese demand for commodities it is not surprising that the HKEx has decided that gaining control of the LME will be useful in arbitraging between physical and futures markets and ensuring adequate supplies. But whether this will be welcomed by the big commodity trading houses such as Glencore is unclear.

The London Stock Exchange sought to become a natural resources hub by merging with Toronto, but failed miserably because of Canadian nationalism.

The LME takeover is another sign of the tectonic plate of global economic commerce shifting towards Asia.

Fraud friendly

Britain's corporate, financial and banking miscreants must wake up each morning and thank their lucky stars that they live in Britain which has proved so useless as dealing with commercial crime.

Cricket lover Allen Stanford faces 110 years in a Houston prison for his $7billion Ponzi scheme whereas our own Serious Fraud Office finds itself under investigation rather than the wrongdoers.